Provisional refund of ninety percent: the mechanism and how to keep it
The law promises most of your money in seven days. Risk parameters decide whether you get it.
Section 54(6) with Rule 91 provides for a provisional refund of ninety percent of the amount claimed on account of zero rated supplies, to be granted in RFD-04 within seven days of the acknowledgement, with the balance sanctioned after verification. The provisional refund is not available where the applicant has been prosecuted for specified offences during the preceding period, and in practice it is withheld where the claim is flagged on risk parameters.
How it is meant to work
On acknowledgement of a complete RFD-01 for a zero rated claim, the proper officer grants ninety percent provisionally in RFD-04 within seven days, on a provisional basis and without a detailed examination.
The balance is sanctioned after verification, in RFD-06, with the payment order in RFD-05.
The provisional refund is not an entitlement independent of the claim. Where the final order rejects part of the claim, the excess provisional amount is recoverable.
Why it is not received
The application is not complete, so no acknowledgement issues and the seven day clock never starts. This is the most common reason and it is entirely within your control.
The claim is flagged on risk parameters — a new registration, a sharp increase in claim value, suppliers with filing defaults, or a mismatch between the shipping bill and the return.
The exporter is within the excluded category for the specified offences.
In each case the answer is the same: make the application complete, and reduce the risk signals by cleaning the supplier and reconciliation position before filing.
What to do when it is withheld
Ask in writing for the reason and for the acknowledgement status. An application pending without an acknowledgement and without a deficiency memo is an administrative failure that a written request usually cures.
Where the claim is flagged, respond to the verification with the invoice level reconciliation, the supplier filing status, and the shipping bill match, rather than waiting for a notice.
Track the sixty day interest date regardless of the provisional refund, because interest under Section 56 runs on the refund and not on the provisional part.
Where the delay is prolonged and unexplained, a writ for a direction to decide the application is effective, and courts have granted it with interest.
What to do on Monday
Make completeness the priority in every filing; the provisional refund depends on the acknowledgement, not on the merits.
Clean the supplier filing position and the shipping bill reconciliation before filing, to reduce risk flags.
Write for the acknowledgement status if neither RFD-02 nor RFD-03 issues within a week.
Track sixty days from acknowledgement for interest on the whole claim.
This page states the general position. A reader with a specific question on their own facts may write to the GST practice at AMLEGALS.
Write to the GST practiceQuestions we are asked on this
Is the seven day period enforceable?
It is directory in practice, but a written request citing Rule 91 and the acknowledgement date moves most files, and a writ is available where the delay is unexplained.
Does the provisional refund require a bond?
No bond is prescribed for the provisional refund itself, but the amount is recoverable if the final order rejects the claim.
Is provisional refund available for inverted duty claims?
The provision is framed for zero rated supplies. Verify the current rules before assuming availability for other categories.
Does a deficiency memo affect the provisional refund?
Yes, entirely. Without an acknowledgement there is no provisional refund.
Can the provisional refund be withheld for a pending demand?
Withholding requires the Section 54(11) route with a recorded opinion. Ask for it.
In this cluster
- GST refunds: every category, every form, every deadline
- Export refunds: the LUT route versus the IGST route
- VKC Footsteps: why input service tax stays stuck in an inverted duty structure
- Replying to RFD-08: the refund rejection notice
- Deficiency memos in RFD-03 and the limitation reset problem
- Interest on delayed refunds under Section 56
- Unjust enrichment in GST refunds: when it applies, and when it does not
- Section 77: refund where tax was paid under the wrong head
- SEZ supplies and refund: endorsement, authorised operations and the disputes
- Deemed exports and the refund to the recipient
GST Insights is published by AMLEGALS for general information. Law stated as on 3 September 2026. Not advice on any particular set of facts; not an advertisement or a solicitation under Rule 36 of the Bar Council of India Rules. Readers with a question on their own facts may write to the GST practice of their own accord.